Half-yearly Results

08 August 2025

I-RES H1 2025 Results

Irish Residential Properties REIT plc

RESULTS FOR THE SIX MONTHS TO 30 JUNE 2025

Strong Performance Delivering Earnings Growth & Shareholder Value

Key Highlights

Irish Residential Properties REIT plc (“I-RES” or the “Company”), the leading provider of rental homes in Ireland, today issues its interim results for the six-month period from 1 January 2025 to 30 June 2025.

• Earnings growth of 2.4% for the period with adjusted EPRA earnings of €14.5 million and 2.9% growth in adjusted EPRA EPS to 2.8 cent, notwithstanding the sale of approximately 2% of units in the portfolio in the last 12 months.
• Adjusted Earnings (excluding fair value movements) growth of 9.5% to €16.0 million in H1 2025 (H1 2024: €14.6 million), reflecting the ongoing success of the asset recycling programme in generating sales premia significantly ahead of book values.
• Net Rental Income (“NRI”) margin increase of 150 bps period on period, with a H1 2025 margin of 78.0% (H1 2024: 76.5%) due to our intense focus on operating efficiency and successful implementation of cost management initiatives.
• Successful debt refinancing in the period ensures financial position remains robust, with the new facilities in place for a 5-year term expiring in March 2030 with the option of two one-year extensions.
• Return of surplus capital to shareholders by way of an accretive share buyback of €5 million completed in the period.
• Government announcement of the proposed new rental regulation during the period has improved the outlook for the business.

Eddie Byrne, I-RES’ Chief Executive Officer, said:

“The first six months of the year have seen a step change in our operational and financial performance leading to significant improvements in margins and earnings. We have made real progress on our strategic initiatives including leveraging our operational capabilities to deliver 150 bps margin improvement. We have executed on our asset disposals programme achieving in excess of 25% premium to book value whilst maintaining a focus on delivering shareholder value through our capital allocation framework. We are well positioned to capitalise on the improving regulatory and market backdrop and we are excited to build on the progress we have made.”

Financial and Operational Highlights

• Achieved strong earnings growth of 2.4% for the period with adjusted EPRA earnings of €14.5 million (H1 2024: €14.2 million) and 2.9% growth in adjusted EPRA EPS to 2.8 cent (H1 2024: 2.7c). This growth in earnings was achieved despite the sale of approximately 2% of units in the portfolio, through our asset disposal programme and the Harmonised Index of Consumer Prices (“HICP”) being below 2% for most of the past 12 months inhibiting our ability to capture rental growth. As a result of the disposals and low HICP rate, revenue decreased by 0.4% period on period to €42.6 million. Average monthly rent (“AMR”) increased by 1.5% to €1,823 since 30 June 2024 and by 0.5% since 31 December 2024.
• EPRA Earnings of €14.5m grew by 23.2% vs prior period of €11.8m due to the elimination of non-recurring costs in 2025.
• Adjusted Earnings (excluding fair value movements) growth of 9.5% to €16.0 million in H1 2025 (H1 2024: €14.6 million), reflecting the ongoing success of our ongoing asset recycling programme in generating sales premia significantly ahead of book values.
• The portfolio continues to be effectively fully occupied at 99.5% (30 June 2024: 99.6%) which reflects both our highly effective operating platform and the continued strong underlying demand for high quality rental properties in Dublin.
• Achieved a significant NRI margin increase of 150 bps period on period, with a H1 2025 margin of 78.0% (H1 2024: 76.5%). NRI for the period of €33.3 million increased by 1.6% versus the same period last year. This strong performance reflects the intense focus on costs and successful implementation of cost management and recovery initiatives over the last year building on the momentum achieved in H2 2024. We will continue to focus on driving efficiencies in order to sustain the increases achieved.
• Successful refinancing of Revolving Credit Facility (“RCF”) in the period ensures financial position remains robust, with the new facilities in place for 5 years with two one-year extension options. Following this refinancing the current weighted average cost of interest across the Group’s facilities for the period is approximately 3.73%, broadly in line with the Group’s weighted average financing costs in 2024.

• The Company completed the disposal of 16 units in H1 2025 as part of the previously announced target of 315 units across a 3-5 year period, achieving sales premiums in excess of c. 25% above book value. As at 30 June 2025, the Company had 16 units in a sales process which we expect to complete in the coming months. This takes the total number of  units disposed of to date under the programme to 57 marking continued good progress against the 315 overall target. Disposals completed during the period generated total gross proceeds of €6.6 million and a €1.5 million gain versus book value. Since 30 June, we have completed the disposal of 4 additional units and signed contracts on a further 2 units. The Company remains on track to deliver the disposal of 50 units in 2025 and given the strong sales premia achieved in H1, we now expect average sales premium achieved on these sales in 2025 to be ahead of the previous expectation of 15% to 20%. 

Balance Sheet and Capital Allocation

• As at 30 June 2025, I-RES’ portfolio had a total value of €1,230 million (31 December 2024: €1,232 million) including assets held for sale. This represents a 0.2% reduction compared to 31 December 2024. Factors contributing to the movement in value include the impact of the disposal of 16 units as part of our ongoing asset recycling programme. Yields remained broadly flat in the period with EPRA Net Initial Yield at 5.2% at 30 June 2025 (31 December 2024: 5.1%). We have seen a continuation of yield stability in H1 with prime residential yields remaining at 4.75%. We continue to reinvest in our portfolio of assets, to ensure we maintain our exceptional levels of occupancy and tenant demand, whilst future proofing our assets.
• Net LTV at 30 June 2025 stood at 45.0%, up from 44.4% at 31 December 2024. Our leverage level remains well below the 50% maximum allowed by the Irish REIT regime and the Group’s debt financial leverage ratio covenant. The slight increase can be attributed to the successful completion of the share buyback programme and the upfront transaction costs associated with the refinancing offset by the proceeds of unit sales.
• Recognising the discount between the Company’s share price and its Net Asset Value per share and utilising excess capital generated through premia achieved on disposals, the Company executed a share buyback of €5 million in the period, with approximately 5.1 million shares purchased at an average price per share of 97.3 cents.
• Proceeds from the ongoing asset recycling programme are expected to be deployed towards continuing to actively manage LTV within the target range of 40% to 45%. Thereafter we will prioritise excess capital towards enhancing shareholder value through our capital allocation framework.
• The Board intends to declare a dividend of 2.36 cents per share for the six months ended 30 June 2025, in line with the requirements of Irish REIT legislation and representing the Company’s dividend policy of paying out 85% of EPRA earnings. This represents a 25.5% increase on the H1 2024 dividend of 1.88 cents per share. 

Outlook

• The Company will continue to focus on executing on its strategic objectives to maximise shareholder value whilst also growing revenue and managing costs, with a strong focus on optimising the operational performance of the business. Backed by a highly efficient and scalable internalised platform, set against the backdrop of positive regulatory change and improving market conditions, the Company is exceptionally well positioned to take advantage of tailwinds to drive earnings growth and enhanced shareholder value.
• The Company remains committed to a disciplined capital allocation strategy, prioritising robust balance sheet management, delivering consistent shareholder returns through its ordinary dividend, whilst pursuing long-term value creation by re-investing sales proceeds in strategically located assets that enhance shareholder value or continuing to return capital to shareholders should the large discount to NAV persist.
• The Company welcomes the Government’s ambition to increase the supply of housing, in particular much needed new rental accommodation in Ireland. The Company believes that the proposed suite of new rent regulations announced by Government on the 10th of June 2025 is a positive step in addressing the issues of viability that are facing new apartment developments. These changes along with the subsequent announcement of changes to building regulations will help address these issues of viability which have made yields in Ireland an outlier relative to EU peers. Although the proposed new rules will not take effect until the 1st of March 2026, the Company believes the proposed changes which allow units to be relet at the market rate on tenant turnover will be positive for the business, enhancing returns on the existing portfolio by enabling it to capture the significant reversion embedded in the portfolio. Under the new rules each unit in the portfolio, with a lease commencement after 1st March 2026, that has a turnover will be eligible to be relet at market rent. I-RES rents are currently estimated by independent valuers to be 19% below market. The Company will review the draft Bill carefully upon its publication as legislation is not yet drafted regarding the proposed amendments and will need to go through the legislative process to be enacted.
• Long term structural drivers, such as strong economic growth, favourable demographics and exceptional demand for accommodation, continue to support a sustained growth outlook for the Irish rental market. These developments, underpinned by positive regulatory changes designed to balance the attraction of institutional capital with the protection of renters, are expected to position I-RES favourably to deliver on its strategic objectives, drive growth, and create shareholder value.

Financial Highlights